Review: Hanford vit plant cost increasing

The cost of the Hanford vitrification plant has increased $430 million from close to $12.3 billion to almost $12.7 billion, according to a new review.

That cost increase is for the parts of the plant where construction is progressing -- the Analytical Laboratory, the Low Activity Waste Facility and about 20 smaller support facilities. It does not take into account two key facilities where technical issues must be addressed.

Construction has been stopped at the Pretreatment Facility and a portion of the High Level Waste Facility because of issues that could effect the future safe and efficient operation of the plant.

The projected price increase also does not account for work that could be required if the Department of Energy decides to feed low-activity waste directly to the vitrification plant before the plant is ready to accept high-level radioactive waste.

The new estimate was included in a recent Construction Project Review that focused on parts of the plant where construction has not been halted. The review was done by a team of industry, academic and DOE officials who assess progress and potential problems on the project periodically to advise DOE.

A previous Construction Project Review released in August 2011 identified a potential cost overrun of $800 million to $900 million on the almost $12.3 billion plant, but said there also were opportunities to offset part of that increase with efficiencies.

The new review indicates that $1 billion of work has been identified since 2009 to be covered by a total of about $1.6 billion of contingency spending built into the budget, including some called management reserve. About $434 million of the $1 billion has been identified since the August 2011 Construction Project Review.

More engineering work has been needed than estimated for the plant's budget to address technical issues and make sure the plant operates safely and efficiently.

The plant is being built to treat up to 56 million gallons of waste left from the past production of plutonium for the nation's nuclear weapons program.

The last validated cost for the vitrification plant, almost $12.3 billion, was released in September 2006 after a lengthy and in-depth study by the U.S. Army Corps of Engineers. The Construction Project Review's estimate is not considered a validated cost.

DOE has said that a total new cost for the entire plant cannot be determined until technical issues at key parts of the plant are resolved.

Construction at the Low Activity Waste Facility, the Analytical Laboratory and support facilities is progressing well and should be completed in 2015, the construction review said.

Construction started on the plant as engineering and design work was being done, to allow it to begin treating waste sooner. Engineering now is staying at least six months ahead of construction, the report said. Contractor Bechtel National is increasing staff, including engineering, it said.

The Department of Energy has withheld about $20 million in incentive pay from Bechtel, the review said. But the review also found significant improvement in Bechtel's ability to critically analyze its performance and take action.

DOE and Bechtel now need to begin preparing a plan to start operation of the vitrification plant, which is required in 2019, the review said.

Bechtel released a statement saying it was committed to working with DOE to implement recommendations in the review.

Construction Project Reviews are a valuable tool for DOE, the agency said in a statement. The most recent review acknowledges a number of actions that are already under way on facilities nearing completion and identified other areas that need increased attention, DOE said.